Robbins Eob11 Tif Ch14

Essentials of Organizational Behavior, 11e (Robbins/Judge) Chapter 14 Foundations of Organizational Structure 1) Organizational structure has six key elements. Which of the following is not one of these six key elements? A) chain of command B) departmentalization C) work specialization D) span of control E) location of authority Answer: E Explanation: E) Managers need to address six key elements when they design their organization's structure: work specialization, departmentalization, chain of command, span of control, centralization and decentralization, and formalization. Diff: 2 Page Ref: 202 Objective: Organizational Structure Quest. Category: Concept/Definitional LO: 1 2) A task that is subdivided into many separate jobs is considered to have ________. A) a high degree of departmentalization B) a low degree of decentralization C) a high degree of work specialization D) a wider span of control E) a high degree of formalization Answer: C Explanation: C) The term work specialization describes the degree to which activities in the organization are subdivided into separate jobs. The essence of work specialization is to divide a job into a number of steps, each completed by a separate individual. Diff: 3 Page Ref: 203 Objective: Work Specialization Quest. Category: Concept/Definitional LO: 1

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3) A ________ allows management to make the most efficient use of its employees' skills and even successfully improve them through repetition. A) low degree of centralization B) high degree of formalization C) wider span of control D) low degree of departmentalization E) high degree of work specialization Answer: E Explanation: E) Work specialization describes the degree to which activities in the organization are subdivided into separate jobs. Because not all employees in an organization have the same skills, management saw specialization as a means of making the most efficient use of its employees' skills and even successfully improving them through repetition. Diff: 2 Page Ref: 203 Objective: Work Specialization Quest. Category: Concept/Definitional LO: 1 4) Which of the following statements is true regarding work specialization? A) Work specialization indicates to what degree will there be rules and formalization regulations to direct employees and managers. B) Work specialization decreases the time spent in changing tasks. C) Work specialization increases the cost of finding and training workers to do specific and repetitive tasks. D) Work specialization provides an unending source of increased productivity. E) Work specialization hinders efficient use of employee skills. Answer: B Explanation: B) Work specialization indicates the degree to which activities in the organization are subdivided into separate jobs. Work specialization makes the most efficient use of employees' skills. Less time is spent in changing tasks, putting away tools and equipment from a prior step, and getting ready for another. Diff: 2 Page Ref: 203 Objective: Work Specialization Quest. Category: Concept/Definitional LO: 1

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5) The basis by which jobs are grouped is called ________. A) formalization B) departmentalization C) chain of command D) span of control E) centralization Answer: B Explanation: B) The basis by which jobs are grouped is called departmentalization. The most popular way to group activities is by functions performed. We can also departmentalize jobs by the type of product or service the organization produces. Diff: 2 Page Ref: 204 Quest. Category: Concept/Definitional LO: 1 6) Which one of the following is not one of the primary ways to group jobs? A) skill B) customer C) function D) product E) service Answer: A Explanation: A) One popular way to group activities is by functions performed. Businesses also departmentalize jobs by the type of product or service the organization produces. A firm can also departmentalize on the basis of geography, or territory. A final category of departmentalization uses the particular type of customer the organization seeks to reach. Grouping jobs by skills required is not a primary way of grouping jobs. Diff: 2 Page Ref: 204 Objective: Ways to Group Activities Quest. Category: Concept/Definitional LO: 1

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7) A manufacturing manager organizes a plant into engineering, accounting, manufacturing, personnel, and supply specialists departments. This division of an organization into groups according to work functions is an example of ________. A) social clustering B) bureaucracy C) specialization D) centralization E) departmentalization Answer: E Explanation: E) The basis by which jobs are grouped is called departmentalization. One of the most popular ways to group activities is by functions performed. Organizing a plant into engineering, accounting, manufacturing, personnel, and supply specialists departments is an example of departmentalization. Diff: 2 Page Ref: 204 AACSB: Analytic Skills Objective: Departmentalization Quest. Category: Application LO: 1 8) Blueberry Inc. has organized its operations in departments like engineering, accounting, manufacturing, personnel, and purchasing. This is an example of ________ departmentalization. A) target customer B) product C) functional D) geographic E) categorical Answer: C Explanation: C) One of the most popular ways to group activities is by functions performed. A manufacturing manager might organize a plant into engineering, accounting, manufacturing, personnel, and supply specialists departments. Diff: 2 Page Ref: 204 Objective: Function Quest. Category: Concept/Definitional LO: 1

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9) AgriProducers provides services related to the testing of soil and crops. It also provides advice to its customers for improving the productivity of the soil and the quality of the crops. It has customers all over the United States. The crops and soil are different in the various large areas of the nation, such as the West Coast, and the Mid-West. Which type of departmentalization would be best for AgriProducers? A) functional B) process C) product D) geographic E) temporal Answer: D Explanation: D) AgriProducers needs would best be served by departmentalizing on the basis of geography. This form is valuable when an organization's customers are scattered over a large geographic area and have similar needs based on their location. Diff: 2 Page Ref: 204 AACSB: Analytic Skills Objective: Function Quest. Category: Application LO: 1 10) Some of the departments in Proctor & Gamble are Tide, Pampers, Charmin, and Pringles. This is an example of departmentalization by ________. A) function B) process C) geography D) product E) interest Answer: D Explanation: D) Firms can departmentalize jobs by the type of product the organization produces. Procter & Gamble places each major product, such as Tide, Pampers, Charmin, and Pringles, under an executive who has complete global responsibility for it. Diff: 1 Page Ref: 204 AACSB: Analytic Skills Objective: Product Quest. Category: Application LO: 1

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11) Aeronautics Inc., a parts supplier, has departments for government aircraft and contracts, large commercial aircraft clients, and small personal aircraft clients. This is an example of ________ departmentalization. A) product B) function C) geography D) customer E) service Answer: D Explanation: D) A firm can departmentalize based on the particular type of customer the organization seeks to reach. Customers in each department have a common set of problems and needs best met by having specialists for each. Aeronoautics Inc. is departmentalized to meet different customer needs. Diff: 2 Page Ref: 204 AACSB: Analytic Skills Objective: Function Quest. Category: Application LO: 1 12) Chain of command is a key element of an organization's structure. Which of the following key questions is addressed by this element? A) How many individuals can a manager efficiently and effectively direct? B) To whom do individuals and groups report? C) On what basis will jobs be grouped together? D) To what degree are activities subdivided Work specialization into separate jobs? E) To what degree will there be rules and regulations to direct employees and managers? Answer: B Explanation: B) The chain of command is an unbroken line of authority that extends from the top of the organization to the lowest echelon and clarifies who reports to whom. It answers questions such as "To whom do I go if I have a problem?" and "To whom am I responsible?" Diff: 2 Page Ref: 205 Objective: Chain of Command Quest. Category: Concept/Definitional LO: 1

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13) The right inherent in a managerial position to give orders and expect orders to be obeyed is termed ________. A) chain of command B) authority C) span of control D) unity of command E) leadership Answer: B Explanation: B) Chain of command can't be discussed without discussing authority. Authority refers to the rights inherent in a managerial position to give orders and expect them to be obeyed. To facilitate coordination, each managerial position is given a place in the chain of command, and each manager is given a degree of authority in order to meet his or her responsibilities. Diff: 2 Page Ref: 205 Objective: Authority Quest. Category: Concept/Definitional LO: 1 14) The principle of ________ helps preserve the concept of an unbroken line of authority. A) span of control B) chain of command C) cross-functionality D) centralization E) unity of command Answer: E Explanation: E) The principle of unity of command helps preserve the concept of an unbroken line of authority. It says a person should have one and only one superior to whom he or she is directly responsible. If the unity of command is broken, an employee might have to cope with conflicting demands or priorities from several superiors. Diff: 2 Page Ref: 205 Objective: Unity-of-Command Principle Quest. Category: Concept/Definitional LO: 1

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15) The unity-of-command principle states that ________. A) managers should limit their oversight to a maximum of 12 employees B) managers should oversee 1-4 employees on average C) an individual should be directly responsible to only one supervisor D) managers should provide direction to their employees in a unified fashion E) employees should report directly to two supervisors to maintain task balance Answer: C Explanation: C) The principle of unity of command helps preserve the concept of an unbroken line of authority. It says a person should have one and only one superior to whom he or she is directly responsible. Diff: 2 Page Ref: 205 Objective: Unity-of-Command Principle Quest. Category: Concept/Definitional LO: 1 16) Span of control is a key element of an organization's structure. Which of the following key questions is addressed by this element? A) On what basis will jobs be grouped together? B) To whom do individuals and groups report? C) To what degree will there be rules and regulations to direct employees and managers? D) How many individuals can a manager efficiently and effectively direct? E) To what degree are activities subdivided into separate jobs? Answer: D Explanation: D) Span of control determines the number of levels and managers an organization has. All things being equal, the wider or larger the span, the more efficient the organization. Diff: 2 Page Ref: 205 Objective: Span of Control Quest. Category: Concept/Definitional LO: 1 17) A wider span of control ________. A) increases costs B) decreases the speed of decision making C) decreases flexibility D) brings the organization closer to customers E) discourages employee autonomy Answer: D Explanation: D) A wider span of control reduces costs, cuts overhead, improves speed of decision making, increases flexibility, gets closer to customers, and empowers employees. Diff: 3 Page Ref: 206 Objective: Span of Control Quest. Category: Concept/Definitional LO: 1

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18) A ________ is consistent with recent efforts by companies to reduce costs, cut overhead, speed up decision making, increase flexibility, get closer to customers, and empower employees. A) wider span of control B) high degree of formalization C) longer chain of command D) lack of work specialization E) high degree of centralization Answer: A Explanation: A) The trend in recent years has been toward wider spans of control, which are consistent with efforts to reduce costs, cut overhead, speed decision making, increase flexibility, get closer to customers, and empower employees. Diff: 2 Page Ref: 206 Objective: Span of Control Quest. Category: Concept/Definitional LO: 1 19) A narrow span of control ________. A) encourages employee autonomy B) is expensive because it adds levels of management C) simplifies vertical communication D) increases the speed of decision making E) discourages overly tight supervision Answer: B Explanation: B) Narrow spans of control are expensive because they add levels of management. The added levels of hierarchy slow down decision making and tend to isolate upper management. Diff: 2 Page Ref: 205-206 Objective: Span of Control Quest. Category: Concept/Definitional LO: 1 20) ________ refers to the degree to which decision making is concentrated at a single point in the organization. A) Formalization B) Departmentalization C) Centralization D) Work specialization E) Line of command Answer: C Explanation: C) Centralization refers to the degree to which decision making is concentrated at a single point in the organization. In centralized organizations, top managers make all the decisions, and lower-level managers merely carry out their directives. Diff: 2 Page Ref: 206 Objective: Centralization and Decentralization Quest. Category: Concept/Definitional LO: 1 21) Which of the following statements is true regarding a centralized organization? 9 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

A) A centralized organization is more flexible than a decentralized organization. B) In a centralized organization, decision making is pushed down to the managers closest to the action. C) A centralized organization is more responsive than a decentralized organization. D) In a centralized organization, top managers are rarely involved in decision making. E) In a centralized organization, decision making is concentrated at a single point in the organization. Answer: E Explanation: E) Centralization refers to the degree to which decision making is concentrated at a single point in the organization. In centralized organizations, top managers make all the decisions, and lower-level managers merely carry out their directives. Diff: 2 Page Ref: 206 Objective: Centralization Quest. Category: Concept/Definitional LO: 1 22) The more the lower-level personnel provide input or are actually given the discretion to make decisions, the ________ within that organization. A) higher is the degree of formalization B) lower is the level of empowerment C) lower is the degree of work specialization D) higher is the degree of departmentalization E) higher is the degree of decentralization Answer: E Explanation: E) In decentralized organizations decision making is pushed down to the managers closest to the action. A decentralized organization can act more quickly to solve problems, more people provide input into decisions, and employees are less likely to feel alienated from those who make decisions that affect their work lives. Diff: 2 Page Ref: 206 Objective: Decentralization Quest. Category: Concept/Definitional LO: 1

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23) Publishing representatives who call on college professors to inform them of their company's new publications have a great deal of freedom in their jobs. They have only a general sales pitch, which they tailor as needed. Based on this information, we can say that the job of these publishing representatives ________. A) score low on the degree of work specialization B) score low on the degree of decentralization C) score high on the degree of departmentalization D) score high on the degree of centralization E) score low on the degree of formalization Answer: E Explanation: E) Formalization refers to the degree to which jobs within the organization are standardized. If a job is highly formalized, the incumbent has a minimum amount of discretion over what, when, and how to do it. The publishing representatives have a great deal of freedom in their jobs so we can say that the job scores low on the degree of formalization. Diff: 2 Page Ref: 206-207 AACSB: Analytic Skills Objective: Centralization Quest. Category: Application LO: 1 24) ________ refers to the degree to which jobs within the organization are standardized. A) Formalization B) Decentralization C) Departmentalization D) Span of control E) Chain of command Answer: A Explanation: A) Formalization refers to the degree to which jobs within the organization are standardized. If a job is highly formalized, the incumbent has a minimum amount of discretion over what, when, and how to do it. Diff: 2 Page Ref: 206 Objective: Span of Control Quest. Category: Concept/Definitional LO: 1

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25) Which of the following is not a characteristic of a highly formalized organization? A) clearly defined procedures covering work processes B) explicit job description C) high employee job discretion D) a large number of organizational rules E) a consistent and uniform output Answer: C Explanation: C) Formalization refers to the degree to which jobs within the organization are standardized. If a job is highly formalized, the incumbent has a minimum amount of discretion over what, when, and how to do it. Diff: 2 Page Ref: 206-207 Objective: Formalization Quest. Category: Concept/Definitional LO: 1 26) Employee discretion is inversely related to ________. A) complexity B) formaliztion C) specialization D) departmentalization E) empowerment Answer: B Explanation: B) Where formalization is low, job behaviors are relatively unprogrammed, and employees have a great deal of freedom to exercise discretion in their work. Standardization not only eliminates the possibility of employees engaging in alternative behaviors, but it even removes the need for employees to consider alternatives. Diff: 3 Page Ref: 207 Objective: Formalization Quest. Category: Concept/Definitional LO: 1

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27) The clerical and editorial employees in a publishing house need to be at their desks by 8:00 AM and follow a set of precise procedures dictated by management. The jobs of these clerical and editorial employees ________. A) have a wide span of control B) score high on the degree of departmentalization C) score high on the degree of formalization D) lack a unity of command E) score low on the degree of work specialization Answer: C Explanation: C) Formalization refers to the degree to which jobs within the organization are standardized. If a job is highly formalized, the incumbent has a minimum amount of discretion over what, when, and how to do it. A high degree of formalization is characterized by clearly defined procedures covering work processes in organizations. Since the clerical and editorial employees have to follow a set of precise procedures dictated by management, their jobs score high on the degree of formalization. Diff: 2 Page Ref: 207 Objective: Organizational Designs Quest. Category: Concept/Definitional LO: 1 28) The ________ is characterized by a low degree of departmentalization, wide spans of control, authority centralized in a single person, and little formalization. A) bureaucracy B) matrix organization C) simple structure D) team structure E) centralized structure Answer: C Explanation: C) The simple structure is not elaborate. It has a low degree of departmentalization, wide spans of control, authority centralized in a single person, and little formalization. It is a "flat" organization; it usually has only two or three vertical levels, a loose body of employees, and one individual in whom the decision-making authority is centralized. Diff: 2 Page Ref: 207 Objective: Simple Structure Quest. Category: Concept/Definitional LO: 2

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29) Which of the following statements is true about the simple structure? A) It is very expensive to operate. B) It is characterized by a high degree of departmentalization. C) It becomes increasingly inadequate as an organization grows. D) It is rigid. E) It is characterized by a narrow span of control. Answer: C Explanation: C) A simple structure has a low degree of departmentalization, wide spans of control, authority centralized in a single person, and little formalization. It's fast, flexible, and inexpensive to operate, and accountability is clear. One major weakness is that it's difficult to maintain in anything other than small organizations. It becomes increasingly inadequate as an organization grows because its low formalization and high centralization tend to create information overload at the top. Diff: 2 Page Ref: 207 Objective: Simple Structure Quest. Category: Concept/Definitional LO: 2 30) Samantha is the owner of a flower shop. She has five employees that all report directly to her and she makes all the decisions regarding the type and quantity of flowers and looks after the shop's finances. Which type of organizational structure does Samantha have? A) bureaucracy B) virtual structure C) matrix structure D) boundaryless structure E) simple structure Answer: E Explanation: E) A simple structure has a low degree of departmentalization, wide spans of control, authority centralized in a single person, and little formalization. It is a "flat" organization; it usually has only two or three vertical levels, a loose body of employees, and one individual in whom the decision-making authority is centralized. So Samantha's shop has a simple structure. Diff: 2 Page Ref: 207 AACSB: Analytic Skills Objective: Simple Structure Quest. Category: Application LO: 2

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31) With reference to organizational designs, the ________ structure is most widely practiced in small businesses in which the manager and owner are one and the same. A) matrix B) virtual C) boundaryless D) simple E) bureaucracy Answer: D Explanation: D) The simple structure has a low degree of departmentalization, wide spans of control, authority centralized in a single person, and little formalization. The simple structure is most widely practiced in small businesses in which the manager and owner are one and the same. Diff: 2 Page Ref: 207 Objective: Simple Structure Quest. Category: Concept/Definitional LO: 2 32) A bureaucracy is characterized by all of the following except ________. A) highly routine operating tasks B) formalized rules and regulations C) tasks that are grouped into functional departments D) decentralized decision making E) high work specialization Answer: D Explanation: D) A bureaucracy is an organization structure with highly routine operating tasks achieved through specialization, very formalized rules and regulations, tasks that are grouped into functional departments, centralized authority, narrow spans of control, and decision making that follows the chain of command. Diff: 2 Page Ref: 208 Objective: Bureaucracy Quest. Category: Concept/Definitional LO: 2 33) ________ is the key concept that underlies all bureaucracies. A) A dual line of command B) Standardization C) Decentralization D) Employee empowerment E) Wider span of control Answer: B Explanation: B) Standardization is the key concept that underlies all bureaucracies. They all rely on standardized work processes for coordination and control. Diff: 2 Page Ref: 208 Objective: Bureaucracy Quest. Category: Concept/Definitional LO: 2

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34) Which of the following statements is true regarding a bureaucracy? A) Bureaucracies need innovative and experienced decision makers at all levels in the organization. B) Bureaucracy is an ideal organizational design for those organizations that operate under highly uncertain conditions. C) Typically bureaucracies have wider spans of control. D) Bureaucracies can get by with less talented middle- and lower-level managers. E) Bureaucracies encourage employee empowerment. Answer: D Explanation: D) Bureaucracies can get by with less talented—and, hence, less costly—middleand lower-level managers. Rules and regulations substitute for managerial discretion. Standardized operations and high formalization allow decision making to be centralized. There is little need for innovative and experienced decision makers below the level of senior executives. Diff: 2 Page Ref: 208 Objective: Bureaucracy Quest. Category: Concept/Definitional LO: 2 35) Which of the following types of organizational designs combines two forms of departmentalization, functional and product? A) simple structure B) bureaucracy C) matrix structure D) virtual structure E) boundaryless structure Answer: C Explanation: C) The matrix structure combines two forms of departmentalization: functional and product.Thus, members in a matrix structure have a dual chain of command: to their functional department and to their product groups. Diff: 2 Page Ref: 208 Objective: Matrix Quest. Category: Concept/Definitional LO: 2

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36) Which of the following statements is true regarding a matrix structure? A) It breaks the unity-of-command concept. B) It cannot achieve economies of scale. C) It reduces ambiguity about who reports to whom. D) It prevents power struggles. E) It enhances role clarity and avoids role conflict. Answer: A Explanation: A) The matrix structure breaks the unity-of-command concept and increases ambiguity about who reports to whom. The strength of the matrix is its ability to facilitate coordination when the organization has a number of complex and interdependent activities. Diff: 2 Page Ref: 208 Objective: Matrix Quest. Category: Concept/Definitional LO: 2 37) Which of the following types of organization structures is best suitable for coordination when the organization has a number of complex and interdependent activities? A) simple structure B) bureaucracy C) matrix structure D) divisional structure E) centralized structure Answer: C Explanation: C) The matrix structure facilitates coordination when the organization has a number of complex and interdependent activities. It combines two forms of departmentalization: functional and product. Diff: 2 Page Ref: 209 Objective: Matrix Quest. Category: Concept/Definitional LO: 2 38) Which one of the following problems is most likely to occur in a matrix structure? A) decreased response to environmental change B) decreased employee motivation C) decreased economies of scale D) increases groupthink E) power struggles Answer: E Explanation: E) The major disadvantages of the matrix lie in the confusion it creates, its propensity to foster power struggles, and the stress it places on individuals. Without the unity-ofcommand concept, ambiguity about who reports to whom is significantly increased and often leads to conflict. Diff: 3 Page Ref: 209 Objective: Matrix Quest. Category: Concept/Definitional LO: 2 39) The virtual organization is also called the ________ or ________ organization. 17 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

A) network; modular B) boundaryless; social C) divisional; multi-level D) boundaryless; global E) matrix; divisional Answer: A Explanation: A) The virtual organization is also sometimes called the network, or modular, organization. It is typically a small, core organization that outsources major business functions. Diff: 2 Page Ref: 209 Objective: Virtual Organization Quest. Category: Concept/Definitional LO: 3 40) A ________ organization is a small, core organization that outsources major business functions. A) centralized B) virtual C) bureaucratic D) matrix E) simple Answer: B Explanation: B) The virtual organization is also sometimes called the network, or modular, organization. It is typically a small, core organization that outsources major business functions. Diff: 2 Page Ref: 209-210 Objective: Virtual Organization Quest. Category: Concept/Definitional LO: 3 41) Which of the following types of organizations is most likely to operate in a state of perpetual flux and reorganization? A) a highly decentralized organization B) a boundaryless organization C) a matrix organization D) a bureaucracy E) a virtual organization Answer: E Explanation: E) A virtual organization is in a state of perpetual flux and reorganization, which means roles, goals, and responsibilities are unclear. Diff: 2 Page Ref: 211 Objective: Virtual Organization Quest. Category: Concept/Definitional LO: 3

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42) Which of the following statements is true regarding a virtual organization? A) A virtual organization is sometimes called matrix organization. B) A virtual organization is highly decentralized. C) A virtual organization is characterized by high degree of departmentalization. D) A virtual organization tends to have unclear roles, goals, and responsibilities. E) A virtual organization lacks flexibility. Answer: D Explanation: D) A virtual organization is sometimes called modular organization. In structural terms, the virtual organization is highly centralized, with little or no departmentalization. In a virtual organization, roles, goals, and responsibilities tend to be unclear. The major advantage of the virtual organization is its flexibility. Diff: 2 Page Ref: 211 Objective: Virtual Organization Quest. Category: Concept/Definitional LO: 3 43) The major advantage of the virtual organization is its ________. A) decentralized structure B) ability to enhance role clarity C) flexibility D) highly departmentalized structure E) ability to minimize organizational politics Answer: C Explanation: C) The major advantage of the virtual organization is its flexibility. In structural terms, the virtual organization is highly centralized, with little or no departmentalization. Virtual organizations are in a state of perpetual flux and reorganization, which means roles, goals, and responsibilities are unclear: This sets the stage for political behavior. Diff: 2 Page Ref: 211 Objective: Virtual Organization Quest. Category: Concept/Definitional LO: 3 44) Who coined the term "boundaryless organization?" A) Steve Jobs B) Jack Welch C) Henry mintzberg D) Bill Gates E) Frederick Herzberg Answer: B Explanation: B) General Electric's former chairman, Jack Welch, coined the term boundaryless organization. Welch wanted to eliminate vertical and horizontal boundaries within it and break down external barriers between the company and its customers and suppliers. Diff: 2 Page Ref: 211 Objective: Boundaryless Organization Quest. Category: Concept/Definitional LO: 3 45) Lotus Inc. is attempting to flatten its organizational hierarchy. It is encouraging the use of 19 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

cross-hierarchical teams, participative decision-making practices, and the use of 360-degree performance appraisals. Based on this information we can say that Lotus Inc. is attempting to create a ________ organization. A) highly centralized B) virtual C) boundaryless D) highly formalized E) highly departmentalized Answer: C Explanation: C) A boundaryless organization tries to flatten the hierarchy. It encourages usage of cross-functional teams. It encourages participative decision-making practices. It tends to use 360-degree performance appraisals. The boundaryless organization seeks to eliminate the chain of command, have limitless spans of control, and replace departments with empowered teams. In this example Lotus Inc. is attempting to create a boundaryless organization. Diff: 2 Page Ref: 211 Objective: Organic Model Quest. Category: Concept/Definitional LO: 3 46) A boundaryless organization is most likely to ________. A) encourage hierarchical structure B) avoid using cross-functional teams C) discourage participative decision-making practices D) use 360-degree performance appraisals E) replace empowered teams with departments Answer: D Explanation: D) A boundaryless organization tries to flatten the hierarchy. It encourages usage of cross-functional teams. It encourages participative decision-making practices. It tends to use 360-degree performance appraisals. The boundaryless organization seeks to eliminate the chain of command, have limitless spans of control, and replace departments with empowered teams. Diff: 2 Page Ref: 211 Objective: Organization Downsizing Quest. Category: Concept/Definitional LO: 3

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47) ________ is a systematic effort to make an organization leaner by selling off business units, closing locations, or reducing staff. A) Removing boundaries B) Departmentalizing C) Decentralizing D) Downsizing E) Formalizing Answer: D Explanation: D) The goal of the new organizational forms is to improve agility by creating a lean, focused, and flexible organization. Companies may need to cut divisions that aren't adding value. Downsizing is a systematic effort to make an organization leaner by selling off business units, closing locations, or reducing staff. Diff: 2 Page Ref: 212 Objective: Organization Downsizing Quest. Category: Concept/Definitional LO: 4 48) Which of the following is not a strategy to reduce the negative impact of downsizing? A) investment in high-involvement work practices B) early discussion of downsizing with employees C) employee participation in the downsizing process D) removal of vertical boundaries E) provision of post-downsizing assistance Answer: D Explanation: D) Companies can reduce negative impacts by preparing for the post-downsizing environment in advance. Focusing on core competencies are more effective when companies invest in high-involvement work practices afterward. When employers make efforts to discuss downsizing with employees early, employees are less worried about the outcomes. Employees worry less if they can participate in the process in some way. Removal of vertical boundaries is not related to reducing the negative impact of downsizing. Diff: 2 Page Ref: 212 Objective: Organization Downsizing Quest. Category: Concept/Definitional LO: 4

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49) Which of the following is typically a characteristic of the mechanistic model of organization? A) low formalization B) rigid departmentalization C) decentralized management D) wide spans of control E) low specialization Answer: B Explanation: B) The mechanistic model of organization has high specialization, rigid departmentalization, narrow spans of control, centralized management, and high formalization. Diff: 2 Page Ref: 213 Objective: Mechanistic Model Quest. Category: Concept/Definitional LO: 4 50) Which of the following is typically a characteristic of the organic model of organization? A) narrow spans of control B) centralization C) free flow of information D) high formalization E) clear chain of command Answer: C Explanation: C) The organic model of organization has cross-hierarchical teamswide spans of control, decentralized management, low formalization and free flow of information. Diff: 2 Page Ref: 213 Objective: Organic Model Quest. Category: Concept/Definitional LO: 4 51) A(n) ________ strategy emphasizes the introduction of major new products and services. A) innovation B) cost-minimization C) imitation D) organic E) mechanistic Answer: A Explanation: A) The degree to which an organization introduces major new products or services is the innovation strategy. This strategy strives to achieve meaningful and unique innovations. Innovation strategy emphasizes the introduction of major new products and services. Organic and mechanistic are types of organizational designs. Diff: 2 Page Ref: 213 Objective: Innovation Strategy Quest. Category: Concept/Definitional LO: 4

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52) Organizations following a(n) ________ strategy try to both minimize risk and maximize opportunity for profit, moving into new products or new markets only after innovators have proven their viability. A) innovation B) cost-cutting C) imitation D) organic E) mechanistic Answer: C Explanation: C) Organizations following an imitation strategy try to both minimize risk and maximize opportunity for profit, moving new products or new markets only after innovators have proven their viability. Diff: 2 Page Ref: 214 Objective: Determinants of an Organization's Structure Quest. Category: Concept/Definitional LO: 4 53) Which of the following is not part of an organization's environment? A) public pressure groups B) customers C) employees D) competitors E) suppliers Answer: C Explanation: C) An organization's environment includes outside institutions or forces that can affect its performance, such as suppliers, customers, competitors, government regulatory agencies, and public pressure groups. Personnel is not an outside institution. Employees are an integral part of the organization. Diff: 2 Page Ref: 214 Objective: Environment Quest. Category: Concept/Definitional LO: 4

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54) Any organization's environment has three dimensions. Identify these dimensions. A) stability, adaptability, and employee-orientation B) complexity, volatility, and capacity C) replaceability, product-orientation, and stability D) flexibility, employee-orientation, and capacity E) volatality, product-orientation, and adaptability Answer: B Explanation: B) Any organization's environment has three dimensions: capacity, volatility, and complexity. Capacity refers to the degree to which the environment can support growth. Volatility describes the degree of instability in the environment. Complexity is the degree of heterogeneity and concentration among environmental elements. Diff: 2 Page Ref: 215 Objective: Key Dimensions to an Organizational Environment Quest. Category: Concept/Definitional LO: 4 55) Which of the following dimensions of an environment describes the degree to which the environment can support growth? A) capacity B) flexibility C) volatality D) sustainability E) complexity Answer: A Explanation: A) Any organization's environment has three dimensions: capacity, volatility, and complexity. Capacity refers to the degree to which the environment can support growth. Volatility describes the degree of instability in the environment. Complexity is the degree of heterogeneity and concentration among environmental elements. Diff: 2 Page Ref: 215 Objective: Capacity Quest. Category: Concept/Definitional LO: 4

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56) Volatility refers to the degree of ________ within an environment. A) sustainability B) instability C) flexibility D) complexity E) adaptability Answer: B Explanation: B) Any organization's environment has three dimensions: capacity, volatility, and complexity. Capacity refers to the degree to which the environment can support growth. Volatility describes the degree of instability in the environment. Complexity is the degree of heterogeneity and concentration among environmental elements. Diff: 2 Page Ref: 215 Objective: Volatility Quest. Category: Concept/Definitional LO: 4 57) The ________ of an environment refers to the degree of heterogeneity and concentration among environmental elements. A) volatality B) flexibility C) complexity D) adaptability E) permeability Answer: C Explanation: C) Any organization's environment has three dimensions: capacity, volatility, and complexity. Capacity refers to the degree to which the environment can support growth. Volatility describes the degree of instability in the environment. complexity is the degree of heterogeneity and concentration among environmental elements. Diff: 2 Page Ref: 215 Objective: Complexity Quest. Category: Concept/Definitional LO: 4 58) Work specialization contributes to higher employee productivity—but at the price of ________. A) reduced economies of scale B) increased cost C) reduced job satisfaction D) restricted flow of information E) increased complexity Answer: C Explanation: C) Evidence indicates that work specialization contributes to higher employee productivity—but at the price of reduced job satisfaction. Diff: 2 Page Ref: 215 Objective: Decentralization Quest. Category: Concept/Definitional LO: 5 25 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

59) Some individuals want work that makes minimal intellectual demands and provides the security of routine; for them, ________ is a source of job satisfaction. A) free flow of information B) wide span of control C) low formalization D) high work specialization E) high decentralization Answer: D Explanation: D) Some individuals want work that makes minimal intellectual demands and provides the security of routine; for them, high work specialization is a source of job satisfaction. Free flow of information, wide span of control, low formalization, and high decentralization are suitable for complex jobs that need high intellectual capabilities and are performed under uncertain environment. Diff: 2 Page Ref: 216 Objective: Global Implications Quest. Category: Concept/Definitional LO: 5 Consultants Exceptional (CE) has hired you to develop training materials for their consultants. Your first assignment is to develop a training program that helps their consultants to analyze and understand the organizational structure of the company that they are assisting. You believe that in order to adequately evaluate and understand a client company, consultants need to understand the basic organizational structure of the company. Consultants are then able to recommend actions and changes based on the company's structure. 60) One of the questions you tell the trainees to ask is, "To what degree are tasks subdivided into separate jobs?" This question addresses the issue of ________. A) formalization B) work specialization C) span of control D) chain of command E) matrix restructuring Answer: B Explanation: B) Work specialization is the degree to which tasks in an organization are subdivided into separate jobs. Diff: 2 Page Ref: 203 AACSB: Analytic Skills Objective: Work Specialization Quest. Category: Application LO: 1

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61) ________ is addressed by asking the question "On what basis are jobs grouped together?" A) Departmentalization B) Work specialization C) Centralization and decentralization D) Formalization E) Span of control Answer: A Explanation: A) Once jobs are divided through work specialization, they must be grouped so common tasks can be coordinated. The basis by which jobs are grouped is called departmentalization. Diff: 2 Page Ref: 204 AACSB: Analytic Skills Objective: Departmentalization Quest. Category: Application LO: 1 62) Your trainees are given a case study concerning a local manufacturing firm called Acme Products. In assessing Acme's organizational structure, your trainees notice that all of the company's decisions are made by top management, with little or no input from lower-level personnel. The trainees most likely identify Acme as a(n) ________ organization. A) highly decentralized B) highly formalized C) highly departmentalized D) highly centralized E) informally structured Answer: D Explanation: D) Centralization refers to the degree to which decision making is concentrated at a single point in the organization. In centralized organizations, top managers make all the decisions, and lower-level managers merely carry out their directives. Acme is highly centralized. Diff: 2 Page Ref: 206 AACSB: Analytic Skills Objective: Centralization Quest. Category: Application LO: 1

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63) The Acme Products case study notes that the senior management at Acme is concerned because the company takes so long to bring new products to the market. Which of the following approaches would your trainees identify as the most likely solution to resolve this problem? A) reducing the use of cross-functional work teams B) decentralization of the decision-making process C) decreased work specialization D) decreased formalization of policies and procedures E) reduced diversity within the company's work force Answer: B Explanation: B) Decentralized decision making is pushed down to the managers closest to the action. Management efforts to make organizations more flexible and responsive have produced a recent trend toward decentralized decision making by lower-level managers, who are closer to the action and typically have more detailed knowledge about problems than top managers. Acme needs to decentralize its organizational hierarchy for more flexibility. Diff: 2 Page Ref: 206 AACSB: Analytic Skills Objective: Decentralization Quest. Category: Concept/Definitional LO: 1 64) You instruct the trainees to ask the client organization if they have clearly defined procedures covering most of the jobs in the organization and lots of rules and policies. You want to help them understand the ________. A) chain of command B) degree of formalization C) span of control D) degree of departmentalization E) degree of centralization Answer: B Explanation: B) Formalization refers to the degree to which jobs within the organization are standardized. There are explicit job descriptions, lots of organizational rules, and clearly defined procedures covering work processes in organizations in which there is high formalization. Diff: 2 Page Ref: 206-207 AACSB: Analytic Skills Objective: Formalization Quest. Category: Application LO: 1

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Matthew is a new divisional manager. In reorganizing his division, he must make some decisions regarding the span of control for management within his division. 65) The question of span of control determines ________. A) the employee grievance policy of the organization B) the number of levels and managers an organization has C) where decisions are made D) how jobs will be grouped E) how employees will be compensated Answer: B Explanation: B) The number of employees a manager can efficiently and effectively direct refers to the span of control. It is important because it largely determines the number of levels and managers an organization has. All things being equal, the wider or larger the span, the more efficient the organization. Diff: 2 Page Ref: 205 AACSB: Analytic Skills Objective: Span of Control Quest. Category: Application LO: 1 66) While observing the departments in his division, Matthew notices that some managers with wide spans of control seem to perform more effectively than other managers with similarly-sized spans of control. Which of the following statements is most likely to be true regarding the highperforming managers? A) These managers are paid higher salaries than the low-performing managers. B) These managers have eternal locus of control. C) The employees within their departments tend to compete to reach productivity goals, which boosts performance. D) The employees within their departments score high on agreeableness. E) The employees within their departments are highly skilled and very knowledgeable about their jobs. Answer: E Explanation: E) To ensure performance doesn't suffer because of these wider spans, organizations have to invest heavily in employee training. Managers recognize they can handle a wider span when employees know their jobs inside and out or can turn to co-workers when they have questions. Diff: 3 Page Ref: 206 AACSB: Analytic Skills Objective: Span of Control Quest. Category: Application LO: 1

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You are interested in explaining the different types of organizational designs to students of basic management. These students need to know the advantages and disadvantages of each structure as well as the structure's characteristics. 67) You extol the virtues and benefits of standardization. You are probably promoting the ________. A) matrix structure B) virtual organization C) bureaucracy D) team structure E) simple structure Answer: C Explanation: C) Standardization is the key concept that underlies all bureaucracies. The bureaucracy is characterized by highly routine operating tasks achieved through specialization, very formalized rules and regulations, tasks grouped into functional departments, centralized authority, narrow spans of control, and decision making that follows the chain of command. Diff: 2 Page Ref: 208 AACSB: Analytic Skills Objective: Bureaucracy Quest. Category: Application LO: 2 68) You describe to your students a new committee within the university that brings together specialists from all different departments to develop a new interdisciplinary program. The structure of the committee best meets the definition of the ________. A) matrix structure B) simple structure C) boundaryless organization D) virtual organization E) bureaucracy Answer: A Explanation: A) The matrix structure describes an organization structure that creates dual lines of authority and combines functional and product departmentalization. Diff: 3 Page Ref: 208 AACSB: Analytic Skills Objective: Matrix Quest. Category: Application LO: 2

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69) You assign your students a project that involves developing a business plan for a retail chain. The retail chain will have 1000 employees and will serve customers both locally and internationally via a storefront and an Internet catalog. Which of the following organizational designs is least likely to be suitable for this retail store? A) matrix B) virtual C) bureaucracy D) team E) simple Answer: E Explanation: E) A simple structure describes an organization structure characterized by a low degree of departmentalization, wide spans of control, authority centralized in a single person, and little formalization. When an organization begins to employ 50 or 100 people, it's very difficult for the owner-manager to make all the choices. If the structure isn't changed and made more elaborate, the firm often loses momentum and can eventually fail. Diff: 2 Page Ref: 207 AACSB: Analytic Skills Objective: Simple Structure Quest. Category: Application LO: 2 70) You are the CEO of Apex Systems. You have decided to hire other organizations to perform many of the basic functions of your business. You have hired an accounting firm to keep your records, a recruiting firm to handle human resource functions, and a computer firm to handle all records. To keep costs down, you are looking for other areas in which to outsource operations. You have chosen to operate your business as a ________. A) matrix organization B) virtual organization C) highly centralized organization D) boundaryless organization E) beaureaucracy Answer: B Explanation: B) A virtual organization is a small, core organization that outsources major business functions. Diff: 2 Page Ref: 209-210 AACSB: Analytic Skills Objective: Virtual Organization Quest. Category: Application LO: 3

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71) Work specialization increases the time spent in changing tasks. Answer: FALSE Explanation: Due to work specialization less time is spent in changing tasks, putting away tools and equipment from a prior step, and getting ready for another. Diff: 2 Page Ref: 203 Objective: Work Specialization Quest. Category: Concept/Definitional LO: 1 72) The chain of command is an unbroken line of authority that extends from the top of the organization to the lowest echelon and clarifies who reports to whom. Answer: TRUE Explanation: The chain of command is an unbroken line of authority that extends from the top of the organization to the lowest echelon and clarifies who reports to whom. Diff: 3 Page Ref: 205 Objective: Span of Control Quest. Category: Concept/Definitional LO: 1 73) Narrow spans of control make vertical communication in the organization more complex. Answer: TRUE Explanation: Narrow spans of control add level of management. This makes vertical communication in the organization more complex. Diff: 3 Page Ref: 205-206 Objective: Decentralization Quest. Category: Concept/Definitional LO: 1 74) Departmentalization refers to the degree to which jobs within the organization are standardized. Answer: FALSE Explanation: Formalization refers to the degree to which jobs within the organization are standardized. The basis by which jobs are grouped is called departmentalization. Diff: 2 Page Ref: 206 Objective: Function Quest. Category: Concept/Definitional LO: 1 75) Narrow spans of control increase the speed of decision making. Answer: FALSE Explanation: Narrow spans of control increase levels of hierarchy and slow down decision making. Diff: 3 Page Ref: 206 Objective: Formalization Quest. Category: Concept/Definitional LO: 1 32 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

76) In centralized organizations, top managers make all the decisions, and lower-level managers merely carry out their directives. Answer: TRUE Explanation: In centralized organizations, top managers make all the decisions, and lower-level managers merely carry out their directives. Diff: 2 Page Ref: 206 Objective: Cost-Minimization Strategy Quest. Category: Concept/Definitional LO: 1 77) As compared to decentralized organization, a centralized organization can act more quickly to solve problems. Answer: FALSE Explanation: An organization characterized by centralization is inherently different structurally from one that's decentralized. A decentralized organization can act more quickly to solve problems, more people provide input into decisions, and employees are less likely to feel alienated from those who make decisions that affect their work lives. Diff: 2 Page Ref: 206 Objective: Virtual Organization Quest. Category: Concept/Definitional LO: 1 78) The simple structure is characterized by a high degree of departmentalization and narrow span of control. Answer: FALSE Explanation: The simple structure has a low degree of departmentalization, wide spans of control, authority centralized in a single person, and little formalization. Diff: 3 Page Ref: 207 Objective: Organization Size Quest. Category: Concept/Definitional LO: 2 79) The simple structure becomes increasingly inadequate as an organization grows. Answer: TRUE Explanation: The simple structure becomes increasingly inadequate as an organization grows because its low formalization and high centralization tend to create information overload at the top. Diff: 1 Page Ref: 207 Quest. Category: Concept/Definitional LO: 2

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80) The organizational design of simple structure is highly risky. Answer: TRUE Explanation: Simple structure's weakness is that it's risky because everything depends on one person. One illness can literally destroy the organization's information and decision-making center. Diff: 2 Page Ref: 207 Quest. Category: Concept/Definitional LO: 2 81) The strength of the bureaucracy lies in its ability to perform standardized activities in a highly efficient manner. Answer: TRUE Explanation: The bureaucracy is characterized by highly routine operating tasks achieved through specialization, very formalized rules and regulations, tasks grouped into functional departments, centralized authority, narrow spans of control, and decision making that follows the chain of command. Its primary strength is its ability to perform standardized activities in a highly efficient manner. Diff: 2 Page Ref: 208 Quest. Category: Concept/Definitional LO: 2 82) The bureaucracy is characterized by decentralized authority and wider spans of control. Answer: FALSE Explanation: The bureaucracy is characterized by highly routine operating tasks achieved through specialization, very formalized rules and regulations, tasks grouped into functional departments, centralized authority, narrow spans of control, and decision making that follows the chain of command. Diff: 2 Page Ref: 208 Objective: Organizational Designs and Employee Behavior Quest. Category: Concept/Definitional LO: 2 83) The matrix structure breaks the unity-of-command concept. Answer: TRUE Explanation: The most obvious structural characteristic of the matrix is that it breaks the unityof-command concept. Employees in the matrix have two bosses: their functional department managers and their product managers. Diff: 2 Page Ref: 208 Quest. Category: Concept/Definitional LO: 2

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84) The matrix structure reduces the possibility of power struggles. Answer: FALSE Explanation: The major disadvantages of the matrix lie in the confusion it creates, its propensity to foster power struggles, and the stress it places on individuals. It's not unusual for product managers to fight over getting the best specialists assigned to their products. Bureaucracy reduces the potential for power grabs by defining the rules of the game. When those rules are "up for grabs" in a matrix, power struggles between functional and product managers result. Diff: 3 Page Ref: 209 Objective: Culture and Boundaryless Organization Quest. Category: Concept/Definitional LO: 4 85) In structural terms, the virtual organization is highly centralized, with little or no departmentalization. Answer: TRUE Explanation: Virtual organizations are typically a small, core organization that outsources major business functions. In structural terms, the virtual organization is highly centralized, with little or no departmentalization. Diff: 2 Page Ref: 209-210 Objective: Virtual Organization Quest. Category: Concept/Definitional LO: 3 86) A virtual organization lacks flexibility. Answer: FALSE Explanation: A virtual organization is a small core organization that outsources major business functions. The major advantage of the virtual organization is its flexibility. Diff: 2 Page Ref: 211 Quest. Category: Concept/Definitional LO: 3 87) A boundaryless organization tries to flatten the hierarchy and minimizes status and rank. Answer: TRUE Explanation: A boundaryless organization attempts to eliminate vertical and horizontal boundaries within it and break down external barriers between the company and its customers and suppliers. By removing vertical boundaries, management flattens the hierarchy and minimizes status and rank. Diff: 2 Page Ref: 211 Quest. Category: Concept/Definitional LO: 3

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88) A mechanistic model is similar to a boundaryless organization. Answer: FALSE Explanation: A mechanistic model is similar to a bureaucracy whereas an organic model is similar to a boundaryless organization. Diff: 3 Page Ref: 213 Quest. Category: Concept/Definitional LO: 4 89) The more scarce, dynamic, and complex the environment, the more organic a structure should be. Answer: TRUE Explanation: Organizations that operate in environments characterized as scarce, dynamic, and complex face the greatest degree of uncertainty because they have high unpredictability, little room for error, and a diverse set of elements in the environment to monitor constantly. The more scarce, dynamic, and complex the environment, the more organic a structure should be. Diff: 3 Page Ref: 215 Objective: Key Dimensions to an Organizational Environment Quest. Category: Concept/Definitional LO: 4 90) What is organizational structure? Answer: An organizational structure defines how job tasks are formally divided, grouped, and coordinated. The organizational structure is characterized by six key elements: work specialization, departmentalization, chain of command, span of control, centralization and decentralization, and formalization. Diff: 1 Page Ref: 202 Objective: Organizational Structure Quest. Category: Concept/Definitional LO: 1 91) What is work specialization? Discuss its advantages and drawbacks. Answer: Work specialization, or division of labor indicates the degree to which activities in the organization are subdivided into separate jobs. The essence of work specialization is to divide a job into a number of steps, each completed by a separate individual. In essence, individuals specialize in doing part of an activity rather than the entirety. Work specialization helps in making the most efficient use of its employees' skills and even successfully improving them through repetition. Less time is spent in changing tasks, putting away tools and equipment from a prior step, and getting ready for another. Equally important, it's easier and less costly to find and train workers to do specific and repetitive tasks, especially in highly sophisticated and complex operations. Work specialization can lead to boredom, fatigue, stress, low productivity, poor quality, increased absenteeism, and high turnover, which more than offset the economic advantages. Diff: 3 Page Ref: 203 Objective: Work Specialization Quest. Category: Concept/Definitional LO: 1 36 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

92) What is departmentalization? Answer: The basis by which jobs are grouped together is called departmentalization. Tasks can be grouped by function performed, the type of product the organization produces, on the basis of geography or territory, process used, or by the particular type of customer the organization seeks to reach. Diff: 1 Page Ref: 204 Objective: Departmentalization Quest. Category: Concept/Definitional LO: 1 93) Describe the five common ways of departmentalization. Give an example of each. Answer: a) One of the most popular ways to group activities is by functions performed. A manufacturing manager might organize his or her plant by separating engineering, accounting, manufacturing, personnel, and supply specialists into common departments. b) Tasks can also be departmentalized by type of product the organization produces. Proctor & Gamble is organized along these lines. Each major product is placed under the authority of an executive who has complete global responsibility for that product. c) Another way to departmentalize is on the basis of geography or territory. The sales function, for instance, may have western, southern, mid-western, and eastern regions. Each of these regions is, in effect, a department organized around geography. d) Process departmentalization works for processing customers as well as products. At an Alcoa aluminum tubing plant in upstate New York, production is organized into five departments: casting; press; tubing; finishing; and inspecting, packing, and shipping. Each department specializes in one specific phase in the production of aluminum tubing. e) A final category is to use the particular type of customer the organization seeks to reach. Microsoft recently reorganized around four customer markets: consumers, large corporations, software developers, and small businesses. Diff: 2 Page Ref: 204 Objective: Ways to Group Activities Quest. Category: Concept/Definitional LO: 1 94) Compare and contrast centralized and decentralized organizations. Answer: In centralized organizations, top managers make all the decisions, and lower-level managers merely carry out their directives. In organizations at the other extreme, decentralized decision making is pushed down to the managers closest to the action. An organization characterized by centralization is inherently different structurally from one that's decentralized. A decentralized organization can act more quickly to solve problems, more people provide input into decisions, and employees are less likely to feel alienated from those who make decisions that affect their work lives. Diff: 3 Page Ref: 206 Objective: Work Specialization Quest. Category: Concept/Definitional LO: 1

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95) Formalization is a key element of organizational structure. What is indicated by formalization? Describe the characteristics of a highly formalized organization. Answer: Formalization refers to the degree to which jobs within the organization are standardized. If a job is highly formalized, the incumbent has a minimum amount of discretion over what, when, and how to do it. In a highly formalized organization, employees are always expected to handle the same input in exactly the same way, resulting in a consistent and uniform output. There are explicit job descriptions, lots of organizational rules, and clearly defined procedures covering work processes in organizations in which there is high formalization. Diff: 3 Page Ref: 206-207 Objective: Span of Control Quest. Category: Concept/Definitional LO: 1 96) Describe the simple structure. Discuss its advantages and disadvantages. Answer: Formalization refers to the degree to which jobs within the organization are standardized. If a job is highly formalized, the incumbent has a minimum amount of discretion over what, when, and how to do it. In a highly formalized organization, employees are always expected to handle the same input in exactly the same way, resulting in a consistent and uniform output. There are explicit job descriptions, lots of organizational rules, and clearly defined procedures covering work processes in organizations in which there is high formalization. The strength of the simple structure lies in its simplicity. It's fast, flexible, and inexpensive to operate, and accountability is clear. One major weakness is that it's difficult to maintain in anything other than small organizations. It becomes increasingly inadequate as an organization grows because its low formalization and high centralization tend to create information overload at the top. As size increases, decision making typically becomes slower and can eventually come to a standstill as the single executive tries to continue making all the decisions. The simple structure's other weakness is that it's risky—everything depends on one person. One illness can literally destroy the organization's information and decision-making center. Diff: 2 Page Ref: 206-207 Objective: Centralization and Decentralization Quest. Category: Concept/Definitional LO: 2

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97) Describe the various characteristics of a bureaucracy. Answer: A bureaucracy is characterized by highly routine operating tasks achieved through specialization, very formalized rules and regulations, tasks grouped into functional departments, centralized authority, narrow spans of control, and decision making that follows the chain of command. Its primary strength is its ability to perform standardized activities in a highly efficient manner. Putting like specialties together in functional departments results in economies of scale and minimum duplication of personnel and equipment. In a bureaucracy, rules and regulations substitute for managerial discretion. Standardized operations and high formalization allow decision making to be centralized. There is little need for innovative and experienced decision makers below the level of senior executives. A drawback of bureaucracy is that if cases don't precisely fit the rules, there is no room for modification. The bureaucracy is efficient only as long as employees confront familiar problems with programmed decision rules. Diff: 3 Page Ref: 208 Objective: Virtual Organization Quest. Category: Concept/Definitional LO: 2 98) Discuss the advantages and disadvantages of a matrix structure. Answer: The matrix structure combines two forms of departmentalization: functional and product. The most obvious structural characteristic of the matrix is that it breaks the unity-ofcommand concept. Employees in the matrix have two bosses: their functional department managers and their product managers. The strength of the matrix is its ability to facilitate coordination when the organization has a number of complex and interdependent activities. Direct and frequent contacts between different specialties in the matrix can let information permeate the organization and more quickly reach the people who need it. The major disadvantages of the matrix lie in the confusion it creates, its propensity to foster power struggles, and the stress it places on individuals. Without the unity-of-command concept, ambiguity about who reports to whom is significantly increased and often leads to conflict. Reporting to more than one boss introduces role conflict, and unclear expectations introduce role ambiguity. Diff: 2 Page Ref: 208-209 Objective: Boundaryless Organization Quest. Category: Concept/Definitional LO: 2

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99) Describe the characteristics, advantages, and disadvantages of a virtual organization. Answer: A virtual organization is typically a small, core organization that outsources major business functions. In structural terms, the virtual organization is highly centralized, with little or no departmentalization. In essence, managers in virtual structures spend most of their time coordinating and controlling external relations, typically by way of computer-network links. The major advantage of the virtual organization is its flexibility, which allows individuals with an innovative idea and little money, such as Ancle Hsu and David Ji, to successfully compete against the likes of Sony, Hitachi, and Sharp Electronics. A major drawback of virtual organizations is that they are in a state of perpetual flux and reorganization, which means roles, goals, and responsibilities are unclear: This sets the stage for political behavior. In a virtual organization, cultural alignment and shared goals can be lost because of the low degree of interaction among members. Team members who are geographically dispersed and communicate only intermittently find it difficult to share information and knowledge, which can limit innovation and slow response time. Diff: 2 Page Ref: 209-211 Objective: Chain of Command Quest. Category: Concept/Definitional LO: 3 100) Describe the various ways in which the negative impact of downsizing can be minimized. Answer: Companies can reduce negative impacts by preparing for the post-downsizing environment in advance, thus alleviating some employee stress and strengthening support for the new strategic direction. Some of the ways in which the negative impact of downsizing can be minimized are: a) Investment: Companies that downsize to focus on core competencies are more effective when they invest in high-involvement work practices afterward. b) Communication: When employers make efforts to discuss downsizing with employees early, employees are less worried about the outcomes and feel the company is taking their perspective into account. c) Participation. Employees worry less if they can participate in the process in some way. In some companies, voluntary early retirement programs or severance packages can help achieve leanness without layoffs. d) Assistance. Providing severance, extended health care benefits, and job search assistance demonstrates a company does really care about its employees and honors their contributions. Diff: 2 Page Ref: 212 Objective: Organizational Designs Quest. Category: Concept/Definitional LO: 4

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101) What is the difference between the mechanistic model and the organic model of organizational structure? Answer: The mechanistic model is generally synonymous with the bureaucracy in that it has extensive departmentalization, high formalization, a limited information network (mostly downward communication), and little participation by low-level members in decision making. At the other extreme is the organic model. This model looks a lot like the boundaryless organization. It is flat, uses cross-hierarchical and cross-functional teams, has low formalization, possesses a comprehensive information network and it involves high participation in decision making. The more scarce, dynamic, and complex the environment, the more organic a structure should be. The more abundant, stable, and simple the environment, the more the mechanistic structure will be preferred. Diff: 2 Page Ref: 213-215 Objective: Mechanistic Model and Organic Model Quest. Category: Concept/Definitional LO: 4 102) What are the three dimensions that characterize the environment of an organization? Answer: An organization's environment is composed of those institutions or forces that are outside the organization and potentially affect the organization's performance. These typically include suppliers, customers, competitors, government regulatory agencies, public pressure groups, and the like. a) Capacity refers to the degree to which the environment can support growth. Rich and growing environments generate excess resources, which can buffer the organization in times of relative scarcity. b) Volatility describes the degree of instability in the environment. A dynamic environment with a high degree of unpredictable change makes it difficult for management to make accurate predictions. c) Complexity is the degree of heterogeneity and concentration among environmental elements. Simple environments–like in the tobacco industry–are homogeneous and concentrated. Environments characterized by heterogeneity and dispersion–like the broadband industry–are complex and diverse, with numerous competitors. Diff: 2 Page Ref: 215 Objective: Key Dimensions to an Organizational Environment Quest. Category: Concept/Definitional LO: 4

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